Thursday 3 June 2010 15.21 EDT
First published on Thursday 3 June 2010 15.21 EDT

There are three strong reasons for BP to cut or suspend dividend payments after spilling oil in the Gulf of Mexico. First, the company doesn't know the size of the final bill it will have to pay. Second, BP desperately needs some good publicity. Third, it will look mighty silly if it is later forced into a U-turn by politicians in the US.

This decision would be a mistake. The problem is not that BP cannot afford its dividend: Hayward can make a convincing case that $2.5bn a quarter remains well within BP's financial capabilities.

The company has spent $1bn so far attempting to cap the leak and trying to contain the spill. Even if that figure rises fivefold in the next few months, BP would remain strong. The company has relatively little debt, is generating astonishing sums of cash at the current oil price of $70-plus a barrel, and can always trim its vast exploration budget if it finds itself short of a few billion dollars.

But it would be bone-headed for BP to parade its financial armoury while oil is still belching from the seabed. That is so even when you consider that the bulk of the final bill will be payable only after the lawyers have done their work, which could be several years from now.

BP, if it sticks to its firm dividend line, would be inviting a chorus of outrage across US television networks. It should not be fooled by the fact that only two senators have so far called for a suspension of dividends – just watch the line of critics grow. It's as if BP is taking lessons in public relations from the banks.

The company's desire to protect shareholders from pain is, no doubt, honourably intended. Many investors own the stock primarily for income and a cut would shock the UK market since BP accounts for 12% of all distributions. It is also true that 40% of shareholders sit in the US, so the concern over income extends beyond Britain. Some of those US shareholders include overworked BP employees in the affected states who don't deserve a hit in their wallets on top of their other troubles.

But, at a moment of crisis, one calculation overrides others: don't make more enemies if you don't have to. BP shareholders' long-term interests would be best served by making a short-term dividend sacrifice.